Diamond Builders, Gilridge Investments at loggerheads over payment for EON Apartments construction works

Alleged contractual breaches have forced a building company to take a residential apartment owner to court.

Gilridge Investments is appealing a County Court order that it pay Diamond Builders nearly $300,000 as part of a construction contract.

A residential apartment building owner is challenging a court order to pay a builder nearly $300,000 as part of a construction contract for EON Apartments.

The County Court late last year ordered Gilridge Investments Pty Ltd to pay Diamond Builders $285,577, together with interest and costs, after the latter made a payment claim in court.

The payment was in relation to the design and construction of a low-rise residential apartment building known as EON Apartments in Altona for a contracted sum of $5.3m.

Under the contract, the specified time for making a payment claim was the 25th of each month.

Diamond Builders sent Gilridge a payment claim in January 2023 and attached a spreadsheet that stated it was for work performed between September 26, 2022 and October 25, 2022.

Gilridge Investments argued there was no available reference date, that no new work had been performed for the period the payment claim was made, and that the payment claim was therefore invalid.

A dispute has arisen between the owners of EON Apartments and the builders over payment under the construction contract.

Diamond then successfully applied to the County Court to recover the amount but Gilridge has since challenged the order in the Court of Appeal.

A hearing date is yet to be set.

In the latest legal challenge, the County Court has thrown out an application by Gilridge for its judgment to be stayed pending appeal.

Gilridge relied on a number of factors to secure a stay order, including claims Diamond hade not paid subcontractors and consultants and its construction work included extensive defects.

Diamond argued it had a successful construction business with a healthy balance sheet and $12m worth of work in the pipeline.

The company said it had signed contracts for, and recently started, a project for the construction of 11 luxury apartments in Camberwell worth about $7m and for the building of 16 townhouses worth about $5m in Glenroy.

Diamond said it had also signed a contract for the construction of eight luxury townhouses with a basement in Brighton for about $14m which was due to start sometime in the first quarter of 2024.

Gilridge submitted it had an arguable ground of appeal, and it would obtain leave to appeal.

Diamond argued Gilridge’s case on appeal had no real prospects of success as each of the grounds sought to make new arguments that were either not put to the trial judge or involved issues that were in part conceded.

Justice Sharon Burchell said in her view, the grounds of appeal were weak but arguable. However, she ruled there were no special or exceptional circumstances in the present case that warranted the grant of a stay.